Trade-Ideas LLC identified

Freescale Semiconductor

(

FSL

) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Freescale Semiconductor as such a stock due to the following factors:

  • FSL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $45.7 million.
  • FSL has traded 112,311 shares today.
  • FSL is up 3.1% today.
  • FSL was down 16.6% yesterday.

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More details on FSL:

Freescale Semiconductor, Ltd. provides embedded processors worldwide. FSL has a PE ratio of 36. Currently there are 3 analysts that rate Freescale Semiconductor a buy, no analysts rate it a sell, and 7 rate it a hold.

TheStreet Recommends

The average volume for Freescale Semiconductor has been 1.6 million shares per day over the past 30 days. Freescale Semiconductor has a market cap of $11.7 billion and is part of the technology sector and electronics industry. The stock has a beta of 1.51 and a short float of 6.4% with 3.26 days to cover. Shares are up 25.6% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Freescale Semiconductor as a

hold

. The company's strengths can be seen in multiple areas, such as its expanding profit margins and solid stock price performance. However, as a counter to these strengths, we find that the growth in the company's net income has been quite unimpressive.

Highlights from the ratings report include:

  • The gross profit margin for FREESCALE SEMICONDUCTOR LTD is rather high; currently it is at 52.05%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, FSL's net profit margin of 7.14% significantly trails the industry average.
  • Compared to its closing price of one year ago, FSL's share price has jumped by 131.01%, exceeding the performance of the broader market during that same time frame. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time.
  • FREESCALE SEMICONDUCTOR LTD's earnings per share declined by 37.5% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, FREESCALE SEMICONDUCTOR LTD turned its bottom line around by earning $0.80 versus -$0.81 in the prior year. This year, the market expects an improvement in earnings ($2.00 versus $0.80).
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 13.4%. Since the same quarter one year prior, revenues slightly dropped by 7.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Semiconductors & Semiconductor Equipment industry average. The net income has significantly decreased by 36.0% when compared to the same quarter one year ago, falling from $125.00 million to $80.00 million.

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